Home builders haven't seen much improvement in the struggling market for new homes lately, the builders' trade group said Tuesday:
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today, held in the single digits for a fourth consecutive month in February. The HMI rose a single point to 9 – virtually unchanged from an all-time record low in the previous month – indicating that home builders have seen essentially no improvement in the market for new, single-family homes…
“Home builders are especially concerned about the continually rising number of foreclosures and short sales, which are flooding the market with excess inventory and undermining overall home values,” noted NAHB Chief Economist David Crowe. “This is one reason that home builder expectations for the next six months declined in the February HMI even though traffic of prospective buyers has improved somewhat and present sales conditions were basically unchanged. We are therefore looking forward to working with the Treasury Department as details of its plan to address the urgent foreclosure problem emerge.”
Here's what Mike Larson of Weiss Research had to say about the figures in a report of his own:
It looks like a few more "tire kickers" were active in the housing market in February. I say that because buyer traffic climbed to the highest level since October, according to the NAHB, but actual sales barely budged.
Clearly, housing affordability is on the rise thanks to a combination of lower home prices and relatively cheap mortgage rates. But getting a buyer to put pen to paper is extremely difficult in this environment. Americans are concerned -- rightfully so -- about losing their jobs. They're also hesitant to buy a house now because they're afraid it will be worth less six months or a year later. Before we see a true, lasting turnaround in housing demand, we'll need to see some stabilization in the employment situation and a restoration of buyer confidence. And unfortunately, that doesn't seem to be forthcoming any time soon.